U.S. Foodservice completes deal

Superior Products bought as move toward e-commerce

November 02, 1999|By Amanda J. Crawford | Amanda J. Crawford,SUN STAFF

U.S. Foodservice, the second-largest national food service distributor, said yesterday that it has completed the purchase of Superior Products Mfg. Co.

The Columbia-based company said the acquisition will enable it to expand its food service equipment and supply business.

Analysts expect Superior to play a significant role in the company's electronic commerce initiative, which is expected to be announced next week.

St. Paul, Minn.-based Superior had sales of $127 million last year and has as its customers 160,000 food-service operators nationwide. It is a leader in catalog marketing and operates eight retail stores, including one in Jessup.

Sales of equipment and supplies accounted for 3.5 percent to 4 percent of U.S. Foodservice's business before the acquisition. Bonna Walker, vice president of marketing and public relations, said the company expects that to increase to 5.5 percent or 6 percent.

"We have some of the same product line; we are just expanding that product line," she said.

"We complement each other because where we are weaker, they are stronger, and vice versa."

Lee D. Wilder, an analyst with J. C. Bradford & Co., said Superior will help U.S. Foodservice complete its expansion into the equipment and supply business it entered in December 1997 when it bought Rykoff-Sexton Inc. of Wilkes-Barre, Pa.

"They basically went to Superior because they have a proven track record of success in that business," she said.

Superior is also "certain to be a key platform in their e-commerce initiative that will be announced next week," Wilder said.

Walker would not comment on the initiative but said Internet sales are "something we will be looking at for the future."

"We will be expanding our horizons," she said.

Walker said for now the company will not change Superior's operations. She said the company does not see much duplication in facilities and does not expect closings or layoffs.

Superior has 290 employees. U.S. Foodservice, which closed its fiscal year July 3 with sales of $6.2 billion, has more than 13,000 employees. It markets and distributes more than 43,000 national, private-label and signature-brand items to more than 130,000 food service customers.

Shares of U.S. Foodservice closed yesterday at $18.25, down 93.75 cents.

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